GBP/USD slides further and eyes 1.3800 as USD rallies
- Cable accelerates slide after losing key technical levels.
- US Dollar rebounds and hits highest since Monday.
GBP/USD broke below 1.3850 and dropped quickly to 1.3812, reaching the lowest since Monday. The pair was already lower and extended the decline during the American session. The greenback rose further across the board following Draghi’s press conference.
The US dollar gained momentum on the back of easing fears of a global trade war. Some kind of announcement is expected today from the White House regarding tariffs.
Despite falling against the US dollar, the pound was rising versus the euro. The common currency peaked at the beginning of Draghi’s press conference but then reversed sharply. The slide of EUR/USD added more strength to the rally of the US dollar. The Dollar Index rose from 89.45 to levels on top of 90.00.
Key economic data will be released on Friday. In the UK, trade balance and industrial production and in the US, the official jobs report.
Technical outlook
The short-term tone turned bearish after GBP/USD broke an uptrend line from March lows and also the 1.3850 zone. Momentum continues to favor the downside a test of 1.3800 before the end of the day seems likely. Below support levels are seen at 1.3770 and 1.3755.
To the upside, now 1.3850 is the immediate resistance followed by 1.3880. If the pound rises above the last one, it would remove the short-term bearish pressure and could rise further to test 1.3910 (Mar 7 & 8 highs).
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
